Key Points for September to November 2014

Comparing the estimates for September to November 2014 with those for June to August 2014, employment continued to rise and unemployment continued to fall. These changes maintain the general direction of movement since late 2011/early 2012.

There were 30.80 million people in work. This was 37,000 more than for June to August 2014, the smallest quarterly increase since March to May 2013. Comparing September to November 2014 with a year earlier, there were 512,000 more people in work.

The proportion of people aged from 16 to 64 in work (the employment rate), was 73.0%, unchanged from June to August 2014 but higher than for a year earlier (72.0%).

There were 1.91 million unemployed people. This was 58,000 fewer than for June to August 2014, the smallest quarterly fall since July to September 2013. Comparing September to November 2014 with a year earlier, there were 418,000 fewer unemployed people.

The unemployment rate was 5.8%, lower than for June to August 2014 (6.0%) and lower than for a year earlier (7.1%). The unemployment rate is the proportion of the economically active population (those in work plus those seeking and available to work) who were unemployed.

There were 9.09 million people aged from 16 to 64 who were out of work and not seeking or available to work (known as economically inactive). This was 66,000 more than for June to August 2014 and 41,000 more than for a year earlier.

The proportion of people aged from 16 to 64 who were economically inactive (the inactivity rate) was 22.4%, slightly higher than for June to August 2014 (22.2%) and for a year earlier (22.3%).

Comparing September to November 2014 with a year earlier, pay for employees in Great Britain increased by 1.7% including bonuses and by 1.8% excluding bonuses.

(i) Summary of latest Labour Market Statistics

Table A shows the latest estimates, for September to November 2014, for employment, unemployment and economic inactivity and shows how these estimates compare with the previous quarter (June to August 2014) and the previous year (September to November 2013). Comparing September to November 2014 with June to August 2014 provides a more robust short-term comparison than the change between August to October and September to November. See Making Comparisons with earlier data at Section (ii).

Table A: Summary of latest estimates for September to November 2014, seasonally adjusted

Number (thousands)

Change on Jun-Aug 2014

Change on Sep-Nov 2013

Headline Rate (%)

Change on Jun-Aug 2014

Change on Sep-Nov 2013

Employed

30,801

37

512

Aged 16-64

29,668

15

459

73.0

0.0

1.0

Aged 65+

1,133

23

53

Unemployed

1,914

-58

-418

5.8

-0.2

-1.3

Aged 16-64

1,895

-57

-414

Aged 65+

19

-1

-4

Inactive

19,031

103

244

Aged 16-64

9,094

66

41

22.4

0.1

0.1

Aged 65+

9,937

37

203

Table source: Office for National Statistics

Table notes:

Calculation of headline employment rate: Number of employed people aged from 16 to 64 divided by the population aged from 16 to 64. Population is the sum of employed plus unemployed plus inactive.

Calculation of headline unemployment rate: Number of unemployed people aged 16 and over divided by the sum of employed people aged 16 and over plus unemployed people aged 16 and over.

Calculation of headline economic inactivity rate: Number of economically inactive people aged from 16 to 64 divided by the population aged from 16 to 64. Population is the sum of employed plus unemployed plus inactive.

About labour market statuses

Everybody aged 16 or over is either employed, unemployed or economically inactive. The employment estimates include all people in work including those working part-time. People not working are classed as unemployed if they have been looking for work within the last four weeks and are able to start work within the next two weeks. A common misconception is that the unemployment statistics are a count of people on benefits; this is not the case as they include unemployed people not claiming benefits.

Jobless people who have not been looking for work within the last four weeks or who are unable to start work within the next two weeks are classed as economically inactive. Examples of economically inactive people include people not looking for work because they are students, looking after the family or home, because of illness or disability or because they have retired.

Making comparisons with earlier data

The most robust estimates of short-term movements in the labour market are obtained by comparing the estimates for September to November 2014 with the estimates for June to August 2014, which were first published on 15 October 2014. This provides a more robust estimate than comparing with the estimates for August to October 2014. This is because the September and October data are included within both estimates, so effectively observed differences are those between the individual months of August and November 2014. The Labour Force Survey, from which these estimates are derived, is sampled such that it is representative of the UK population over a three month period, not for single month periods.

Accuracy and reliability of survey estimates

Most of the figures in this Statistical Bulletin come from surveys of households or businesses. Surveys gather information from a sample rather than from the whole population. The sample is designed carefully to allow for this, and to be as accurate as possible given practical limitations such as time and cost constraints, but results from sample surveys are always estimates, not precise figures. This means that they are subject to a margin of error which can have an impact on how changes in the numbers should be interpreted, especially in the short-term.

Changes in the numbers reported in this Statistical Bulletin (and especially the rates) between three month periods are usually not greater than the margin of error. In practice, this means that small, short-term movements in reported rates (for example within +/- 0.3 percentage points) should be treated as indicative, and considered alongside medium and long-term patterns in the series and corresponding movements in administrative sources, where available, to give a fuller picture.

Further information is available in the Accuracy of the Statistics: Estimating and Reporting Uncertainty section of this Statistical Bulletin.

Seasonal adjustment

All estimates discussed in this Statistical Bulletin are seasonally adjusted except where otherwise stated. Like many economic indicators, the labour market is affected by factors that tend to occur at around the same time every year; for example school leavers entering the labour market in July and whether Easter falls in March or April. In order to compare movements other than annual changes in labour market statistics, such as since the previous quarter or since the previous month, the data are seasonally adjusted to remove the effects of seasonal factors and the arrangement of the calendar.

(iii) Detailed Commentary

This section of the Statistical Bulletin consists of the following parts.

People in Work

1. Employment

2. Public and Private Sector Employment

3. Employment by Nationality and Country of Birth

4. Actual Hours Worked

5. Workforce Jobs

6. Average Weekly Earnings

7. Labour Disputes

People not in Work

8. Unemployment

9. Claimant Count

10. Comparison between Unemployment and the Claimant Count

11. Economic Inactivity

Other Labour Market Statistics

12. Young People in the Labour Market

13. Redundancies

14. Vacancies

15. Key Out of Work Benefits

1. Employment

What is employment ?

Employment measures the number of people in work and differs from the number of jobs because some people have more than one job. Further information is available at Notes for Employment at the end of this section.

Where to find more information about employment

Commentary

The proportion of people aged from 16 to 64 in work is known as the employment rate. Chart 1.1 shows the employment rate for people aged from 16 to 64 since comparable records began in 1971. The chart shows that the lowest employment rate was 65.6% in 1983, during the economic downturn of the early 1980s. The employment rate for the latest time period, September to November 2014, was 73.0%, which was 0.2 percentage points lower than the record high of 73.2% recorded for December 2004 to February 2005.

Chart 1.2: Employment rate (aged 16 to 64), seasonally adjusted

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73.0% of people aged from 16 to 64 were in work for September to November 2014. This was:

unchanged from June to August 2014,

up from 72.0% for a year earlier, and

equal to the pre-downturn peak of 73.0% recorded for early 2008.

Looking at employment rates by sex, for September to November 2014, 77.8% of men and 68.2% of women aged from 16 to 64 were in work. These employment rates for men and women were higher than those for a year earlier. The employment rate for men was lower than before the 2008/09 downturn, when it peaked at 79.1% in late 2007/early 2008. However the employment rate for women was the highest since comparable records began in 1971.

For September to November 2014, there were 30.80 million people in work. This was 37,000 more than for June to August 2014, the smallest quarterly increase since March to May 2013. Comparing September to November 2014 with a year earlier, there were 512,000 more people in work.

Looking at type of employment, between September to November 2013 and September to November 2014, as shown in Chart 1.3 the number of:

employees working full-time increased by 386,000 to reach 19.24 million,

employees working part-time increased by 47,000 to reach 6.83 million,

self-employed people working full-time increased by 54,000 to reach 3.22 million,

self-employed people working part-time increased by 68,000 to reach 1.30 million,

unpaid family workers fell by 10,000 to reach 102,000 (see Note 2 at the end of this section for an explanation of the coverage of this series), and

people on government supported training and employment programmes decreased by 33,000 to reach 112,000 (see Note 3 at the end of this section for an explanation of the coverage of this series).

Chart 1.3: Changes in people in employment between September to November 2013 and September to November 2014, seasonally adjusted

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Notes for Employment

Employment consists of employees, self-employed people, unpaid family workers and people on government supported training and employment programmes.

Unpaid family workers are people who work in a family business who do not receive a formal wage or salary but benefit from the profits of that business.

The government supported training and employment programmes series does not include all people on these programmes; it only includes people engaging in any form of work, work experience or work-related training who are not included in the employees or self-employed series. People on these programmes NOT engaging in any form of work, work experience or work-related training are not included in the employment estimates; they are classified as unemployed or economically inactive.

2. Public and Private Sector Employment (first published on 17 December 2014)

What is public and private sector employment ?

Public sector employment measures the number of people in paid work in the public sector. The public sector comprises central government, local government and public corporations. Estimates of public sector employment are obtained from information provided by public sector organisations.

Private sector employment is estimated as the difference between total employment, sourced from the Labour Force Survey, and public sector employment.

Commentary

There were 5.41 million people employed in the public sector for September 2014. This was 7,000 fewer than for June 2014 and the lowest figure since comparable records began in 1999.

There were 25.38 million people employed in the private sector for September 2014, 121,000 more than for June 2014.

Between September 2013 and September 2014, the number of people employed in the public sector fell by 302,000 and the number of people employed in the private sector increased by 890,000. These large annual movements in public and private sector employment were partly due to the reclassifications of Royal Mail plc (in December 2013) and Lloyds Banking Group plc (in March 2014). Excluding the effects of these reclassifications, public sector employment fell by 49,000 and private sector employment increased by 637,000 between September 2013 and September 2014.

For September 2014, 82.4% of people in employment worked in the private sector and the remaining 17.6% worked in the public sector.

Chart 2.1 shows public sector employment as a percentage of all people in employment for the last five years.

Chart 2.1: Public sector employment as a percentage of total employment, seasonally adjusted

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The number of people employed in the public sector has been generally falling since March 2010. Quarterly estimates of public and private sector employment are available back to 1999. Comparisons of public and private sector employment over time are complicated by a number of changes to the composition of these sectors over this period with several large employers moving between the public and private sectors. ONS therefore publishes estimates of public and private sector employment excluding the effects of major reclassifications alongside estimates of total public and private sector employment at Table 4 of the pdf version of this Statistical Bulletin and at data table EMP02 (48 Kb Excel sheet)
.

3. Employment by Nationality and Country of Birth, not seasonally adjusted (first published on 12 November 2014)

What is employment by nationality and country of birth ?

The estimates of employment by both nationality and country of birth relate to the number of people in employment rather than the number of jobs. Changes in the series therefore show net changes in the number of people in employment, not the proportion of new jobs that have been filled by UK and non-UK workers. These estimates should not be used as a proxy for flows of foreign migrants into the UK.

The estimates are not seasonally adjusted and it is therefore best practice to compare the estimates for July to September 2014 with those for a year earlier rather than with those for April to June 2014.

Where to find data about employment by nationality and country of birth

Commentary

Looking at the estimates by nationality, between July to September 2013 and July to September 2014, the number of:

UK nationals working in the UK increased by 445,000 to reach 27.97 million, and

non-UK nationals working in the UK increased by 230,000 to reach 2.90 million.

For July to September 2014, there were 4.75 million people born abroad working in the UK, but the number of non-UK nationals working in the UK was much lower at 2.90 million. This is because the estimates for people born abroad working in the UK include some UK nationals. Looking at the estimates by country of birth, between July to September 2013 and July to September 2014, the number of:

UK born people working in the UK increased by 388,000 to reach 26.13 million, and

non-UK born people working in the UK increased by 312,000 to reach 4.75 million.

Chart 3.1: Employment by nationality and country of birth, changes between July to September 2013 and July to September 2014, not seasonally adjusted

Source: Labour Force Survey - Office for National Statistics

Notes:

Between July to September 2013 and July to September 2014, the total number of people in employment increased by 692,000.

Changes in the UK and non-UK estimates may not sum exactly to changes in the total number of people in employment because some people do not state their country of birth or nationality in their Labour Force Survey interviews.

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Estimates of employment by nationality and country of birth are available back to 1997. For January to March 1997 there were 928,000 non-UK nationals working in the UK (3.5% of all people working in the UK). For July to September 2014, there were 2.90 million non-UK nationals working in the UK (9.4% of all people working in the UK). This increase in the number of non-UK nationals working in the UK since 1997 partly reflects the admission of several new member states to the European Union.

4. Actual Hours Worked

What is actual hours worked ?

Actual hours worked measures the number of hours worked in the economy. Changes in actual hours worked reflect changes in the number of people in employment and the average hours worked by those people.

Chart 4.1: Total hours worked per week, seasonally adjusted

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People working full-time worked, on average, 37.6 hours per week in their main job.

People working part-time worked, on average, 16.1 hours per week in their main job.

These average hours worked estimates were up slightly compared with a year earlier.

5. Workforce Jobs (first published on 17 December 2014)

What is Workforce Jobs ?

Workforce jobs measures the number of filled jobs in the economy. The estimates are mainly sourced from employer surveys. Workforce jobs is a different concept from employment, which is sourced from the Labour Force Survey, as employment is an estimate of people and some people have more than one job.

Where to find data about workforce jobs

Commentary

There were 33.49 million workforce jobs in September 2014, up 129,000 from June 2014 and up 1.21 million on a year earlier. Chart 5.1 shows changes in the number of jobs by industrial sector between September 2013 and September 2014.

Chart 5.1: Workforce jobs changes between September 2013 and September 2014, seasonally adjusted

Source: Office for National Statistics

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Since comparable records began in 1978, the number of jobs in the manufacturing and mining and quarrying sectors has declined, but jobs in the service sectors have increased substantially. In June 1978, the manufacturing and mining and quarrying sectors accounted for 26.4% of all jobs. In September 2014 these sectors accounted for 8.0% of all jobs. In June 1978, 63.2% of all jobs were in the services sector. By September 2014 this proportion had increased to 83.4%.

6. Average Weekly Earnings

What is Average Weekly Earnings ?

Average Weekly Earnings measures money paid to employees in Great Britain in return for work done, before tax and other deductions from pay. The estimates do not include earnings of self-employed people. Estimates are available for both total pay (which includes bonuses) and for regular pay (which excludes bonus payments). The estimates are not just a measure of pay settlements as they also reflect compositional changes within the workforce. Further information is available at Notes for Earnings at the end of this section.

Commentary

Average regular pay (excluding bonuses) for employees in Great Britain was £455 per week before tax and other deductions from pay.

Average total pay (including bonuses) for employees in Great Britain was £483 per week before tax and other deductions from pay.

For September to November 2014, regular pay for employees in Great Britain was 1.8% higher than a year earlier and total pay for employees in Great Britain was 1.7% higher than a year earlier. As shown in Chart 6.1, the three month average growth rates for both total pay and regular pay have been increasing since May to July 2014. Between November 2013 and November 2014, the Consumer Prices Index increased by 1.0%.

Chart 6.1: Average earnings and consumer prices annual growth rates

Source: Office for National Statistics

Notes:

This chart shows monthly estimates for the Consumer Prices Index (CPI) from November 2009 to November 2014 and three month average estimates for Average Weekly Earnings (AWE) from September-November 2009 to September-November 2014.

The CPI series is for the United Kingdom and is compiled from prices data based on a large and representative selection of individual goods and services. The AWE series are for Great Britain and are sourced from the Monthly Wages and Salaries Survey.

The AWE series are seasonally adjusted. The CPI series is not seasonally adjusted.

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Since comparable records began in 2000, average total pay for employees in Great Britain has increased from £311 a week in January 2000 to £483 a week in November 2014; an increase of 55.3%. Between January 2000 and November 2014, the Consumer Prices Index increased by 39.2%.

Notes for Average Weekly Earnings

The estimates are in current prices; this means that they are not adjusted for price inflation. The estimates relate to Great Britain and include salaries but not unearned income, benefits in kind or arrears of pay.

As well as pay settlements, the estimates reflect bonuses, changes in the number of paid hours worked and the impact of employees paid at different rates joining and leaving individual businesses. The estimates also reflect changes in the overall structure of the workforce; for example, fewer low paid jobs in the economy would have an upward effect on the earnings growth rate.

Lloyds Banking Group plc is reclassified to the private sector from April 2014 following the sale of some government owned shares to private sector investors. It is classified to the public sector between July 2009 and March 2014. ONS estimates that, if the April 2014 reclassification had not occurred, the public sector single month growth rates from April 2014 would have been around 0.3 percentage points higher and the corresponding private sector growth rates would have been around 0.1 percentage points lower.

7. Labour Disputes (not seasonally adjusted)

What is labour disputes?

The labour disputes estimates measure strikes connected with terms and conditions of employment.

Commentary

The unemployment rate is not the proportion of the total population who are unemployed. It is the proportion of the economically active population (those in work plus those seeking and available to work) who are unemployed. This follows international guidelines specified by the International Labour Organisation and it ensures that unemployment rates published by ONS are broadly comparable with those published by other countries.

Chart 8.1 shows the unemployment rate for people aged 16 and over since comparable records began in 1971. The chart shows that the lowest unemployment rate was 3.4% in late 1973/early 1974 and the highest rate, of 11.9%, was recorded in 1984 during the downturn of the early 1980s. The unemployment rate for the latest time period, September to November 2014, was 5.8%.

Chart 8.2: Unemployment rate (aged 16 and over), seasonally adjusted

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As shown in Charts 8.1 and 8.2, the unemployment rate for those aged 16 and over for September to November 2014 was 5.8%. This was:

down from 6.0% for June to August 2014,

down from 7.1% for a year earlier, but

higher than the pre-downturn trough of 5.2% for late 2007/early 2008.

For September to November 2014, there were 1.91 million unemployed people. This was 58,000 fewer than for June to August 2014, the smallest quarterly fall since July to September 2013. Comparing September to November 2014 with a year earlier, there were 418,000 fewer unemployed people.

Looking at unemployment for men and women for September to November 2014, there were:

1.07 million unemployed men, 26,000 fewer than for June to August 2014 and 244,000 fewer than for a year earlier, and

845,000 unemployed women, 31,000 fewer than for June to August 2014 and 175,000 fewer than for a year earlier.

Looking in more detail at changes in the number of unemployed people by how long they have been unemployed, between September to November 2013 and September to November 2014, the number of people who were unemployed:

for up to 6 months fell by 153,000 (14.0%) to reach 941,000,

for between 6 and 12 months fell by 80,000 (20.3%) to reach 315,000, and

for over 12 months fell by 185,000 (22.0%) to reach 658,000.

Looking at international comparisons, the unemployment rate for the European Union (EU) was 10.0% of the economically active population for November 2014. Within the EU, the highest unemployment rates were for Greece (25.7% for September 2014) and Spain (23.9% for November 2014) and the lowest were for Austria (4.9% for November 2014) and Germany (5.0% for November 2014). The unemployment rate for the United States was 5.8% for November and 5.6% for December 2014.

Chart 8.3 shows the unemployment rates for the UK, the EU and the United States for the last five years. The chart shows that the unemployment rate for the UK has been substantially lower than that for the whole of the EU. The unemployment rate for the United States peaked at 10.0% in October 2009 (when the rate for the UK was 7.9%). US unemployment has moved in a downward direction since early 2010, and since early 2013 it has generally been slightly lower than the rate for the UK.

Chart 8.3: Unemployment rates for the United Kingdom, European Union and United States, seasonally adjusted

Source: Labour Force Survey - Office for National Statistics

Notes:

The unemployment rates for the UK and the United States are for those aged 16 and over. The unemployment rate for the EU is for those aged from 15 to 74.

This chart shows monthly estimates for the EU and for the United States from November 2009 to November 2014 and three month average estimates for the UK from September-November 2009 to September-November 2014.

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9. Claimant Count

Introduction

The Claimant Count measures the number of people claiming benefits principally for the reason of being unemployed.

Since July 2014, ONS has published two measures of the Claimant Count; the headline Claimant Count (which is a National Statistic) and a new experimental measure published at data table CLA03 (70 Kb Excel sheet)
which, unlike the headline measure, includes some claimants of Universal Credit (UC).

The experimental measure is included in this Statistical Bulletin for the first time this month because the number of Jobcentre Plus offices adopting UC has increased substantially since it was first published as a spreadsheet in July 2014.

While comparable records start in 1971, some data back to 1881 (which do not have National Statistics status) are available from the “Historic Data” worksheet within data table CLA01 (403.5 Kb Excel sheet)
.

What is the headline Claimant Count ?

Since October 1996 it has been a count of the number of people claiming Jobseeker’s Allowance (JSA). Between January 1971 (when comparable estimates start) and September 1996 it is an estimate of the number of people who would have claimed JSA if it had existed at that time.

It includes people who claim JSA but who do not receive payment. For example some claimants will have had their benefits stopped for a limited period of time by Jobcentre Plus; this is known as “sanctioning”. Some people claim JSA in order to receive National Insurance Credits.

Commentary (Headline Claimant Count)

Chart 9.1 shows the headline Claimant Count since comparable records began in 1971. The chart shows that the lowest number of people claiming unemployment related benefits was 422,600 in December 1973 and the highest figure was 3.09 million in July 1986. For the latest month, December 2014, there were 867,700 people claiming Jobseeker’s Allowance (JSA).

Chart 9.1: Headline Claimant Count from January 1971 to December 2014, seasonally adjusted

Source: Office for National Statistics, Department for Work and Pensions

Chart 9.2: Headline Claimant Count, seasonally adjusted

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For December 2014 there were 867,700 people claiming JSA. The number of JSA claimants has fallen for 26 consecutive months and it is:

down 29,700 from November 2014,

down 370,800 from a year earlier, but

89,300 higher than the pre-downturn trough of 778,400 for February 2008.

What is the experimental adjusted Claimant Count ?

The experimental adjusted Claimant Count differs from the headline Claimant Count because, as well as JSA claimants, it also includes some claimants of Universal Credit (UC) from May 2013 (the first month in which the Claimant Count is affected by UC).

Between May 2013 and October 2013, the UC estimates included in the adjusted Claimant Count include all claimants of UC including those who were in work.

From November 2013 they include all out of work UC claimants but include some claimants who are not required to look for work (who should ideally be excluded from the Claimant Count).

See Background Notes to this Statistical Bulletin for further details.

Commentary (Experimental adjusted Claimant Count)

The experimental adjusted Claimant Count shows that, for December 2014, there were 886,200 people claiming unemployment related benefits. This was:

10. Comparison between Unemployment and the Claimant Count

without a job, have actively sought work in the last four weeks and are available to start work in the next two weeks, or;

out of work, have found a job and are waiting to start it in the next two weeks.

People who meet these criteria are classified as unemployed irrespective of whether or not they claim Jobseeker’s Allowance or other benefits. The estimates are derived from the Labour Force Survey and are published for three month average time periods.

The Claimant Count measures the number of people claiming benefits principally for the reason of being unemployed. As explained at Section 9 of this Statistical Bulletin, since July 2014 ONS has published two measures of the Claimant Count; the headline Claimant Count (which is a National Statistic) and a new experimental measure. In this section of the Bulletin, quarterly movements in unemployment are compared with quarterly movements in the headline Claimant Count.

Since October 1996, the headline Claimant Count has been a count of the number of people claiming Jobseeker’s Allowance (JSA). Some JSA claimants will not be classified as unemployed. For example, people in employment working fewer than 16 hours a week can be eligible to claim JSA depending on their income.

Chart 10.1 and the associated spreadsheet compare quarterly movements in unemployment and the headline Claimant Count for the same three month average time periods. The unemployment estimates shown in this comparison exclude unemployed people in the 16 to 17 and 65 and over age groups as well as unemployed people aged from 18 to 24 in full-time education. This provides a more meaningful comparison with the headline Claimant Count than total unemployment because people in these population groups are not usually eligible to claim JSA.

When three month average estimates for the headline Claimant Count are compared with unemployment estimates for the same time periods and for the same population groups (people aged from 18 to 64 excluding 18 to 24 year olds in full-time education), between June to August 2014 and September to November 2014:

Source: Office for National Statistics, Department for Work and Pensions

Notes:

Unemployment estimates are sourced from the Labour Force Survey (a survey of households). The unemployment figures in this chart, and the associated spreadsheet, exclude unemployed people aged from 18 to 24 in full-time education.

Claimant Count estimates are sourced from administrative data from Jobcentre Plus (part of the Department for Work and Pensions).

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11. Economic Inactivity

What is economic inactivity ?

Economically inactive people are not in employment but do not meet the internationally accepted definition of unemployment because they have not been seeking work within the last four weeks and/or they are unable to start work within the next two weeks.

Where to find data on economic inactivity

Commentary

The proportion of people, aged from 16 to 64, not in work and neither seeking nor available to work is known as the economic inactivity rate. Chart 11.1 shows the economic inactivity rate for people aged from 16 to 64 since comparable records began in 1971.

Chart 11.1 shows that the economic inactivity rate increased during the downturn of the early 1980s reaching a record high of 25.9% in 1983. As the economy improved in the late 1980s, the economic inactivity rate resumed its downward path, reaching a record low of 21.7% in late 1989 and 1990, before the economic downturn of the early 1990s drove it back up again. Following an increase in the economic inactivity rate during the downturn of 2008/09, it continued its downward path, although it has been increasing since mid-2014.

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As shown in Charts 11.1 and 11.2, the economic inactivity rate for those aged from 16 to 64 for September to November 2014 was 22.4%. This was slightly higher than for June to August 2014 (22.2%) and for a year earlier (22.3%).

There were 9.09 million people, aged from 16 to 64, not in work and neither seeking nor available to work (known as economically inactive) for September to November 2014, 66,000 more than for June to August 2014 and 41,000 more than for a year earlier.

Looking in more detail at the 9.09 million people aged from 16 to 64 who were economically inactive for September to November 2014:

2.36 million were students, 25,000 more than a year earlier.

2.32 million were looking after the family or home, little changed on a year earlier.

2.03 million were long-term sick, 18,000 more than a year earlier.

1.28 million were retired, 60,000 fewer than a year earlier. This fall in the number of economically inactive people who had retired before reaching the age of 65 reflects ongoing changes to the state pension age for women resulting in fewer women retiring between the ages of 60 and 65.

190,000 were temporarily sick, little changed on a year earlier.

42,000 were discouraged (not looking for work because they thought that no suitable jobs were available), 9,000 fewer than a year earlier.

The remaining 865,000 people gave other reasons for not looking for work or declined to provide a reason in their Labour Force Survey interview, 76,000 more than a year earlier.

Notes:

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It is a common misconception that all people in full-time education are classified as economically inactive. This is not the case as people in full-time education are included in the employment estimates if they have a part-time job and are included in the unemployment estimates if they are seeking part-time work.

Comparing September to November 2014 with June to August 2014, the number of people aged from 16 to 24:

in employment fell by 84,000,

who were unemployed increased by 30,000, and

who were economically inactive increased by 39,000.

Comparing September to November 2014 with September to November 2013, the number of people aged from 16 to 24:

in employment increased by 47,000,

who were unemployed fell by 171,000, and

who were economically inactive increased by 83,000.

Chart 12.2: Changes in the number of young people (aged 16 to 24) in the labour market, seasonally adjusted

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For September to November 2014, the unemployment rate for 16 to 24 year olds was 16.9%. This was:

higher than for June to August 2014 (16.0%),

lower than for a year earlier (20.1%), but

higher than the pre-downturn trough of 13.8% for December 2007 to February 2008.

The unemployment rate for those aged from 16 to 24 has been consistently higher than that for older age groups. Since comparable records began in 1992:

the lowest youth unemployment rate was 11.6% for March to May 2001, and

the highest youth unemployment rate was 22.5% for late 2011.

Comparisons of youth unemployment rates over time are complicated by the fact that, since comparable records began in 1992, the proportion of people aged from 16 to 24 in full-time education has increased substantially from 26.2% for March to May 1992 to 43.6% for September to November 2014. Unemployment rates are not the proportion of the population who are unemployed. They are the proportion of the economically active population (those in work plus those seeking and available to work) who are unemployed. The long-term increase in the proportion of young people going into full-time education reduces the size of the economically active population and therefore increases the unemployment rate.

13. Redundancies

What are redundancies ?

The redundancies estimates measure the number of people who have been made redundant or have taken voluntary redundancy.

Chart 14.1: Vacancies, seasonally adjusted

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15. Key Out of Work Benefits, not seasonally adjusted (first published on 12 November 2014)

What are key out of work benefits ?

Key out of work benefits includes claimants of Jobseeker’s Allowance and Employment and Support Allowance and other incapacity benefits. It also includes claimants of Income Support and Pension Credit. While most people claiming these benefits are out of work a small number are in employment. These estimates exclude claimants in Northern Ireland.

The estimates are not seasonally adjusted and it is therefore best practice to compare the estimates for May 2014 with those for a year earlier rather than with those for February 2014.

Articles about labour market statistics were published in Labour Market Trends (up until 2006) and in Economic and Labour Market Review (from 2007 to 2011). Editions of Labour Market Trends are available on the website from July 2001 until December 2006 when the publication was discontinued. Editions of Economic and Labour Market Review are available on the website from the first edition, published in January 2007, up until the last edition published in May 2011.

Methodological articles

(v) Revisions

Estimates for the most recent time periods are subject to revision due to the receipt of late and corrected responses to business surveys and revisions to seasonal adjustment factors which are re-estimated every month. Estimates are subject to longer run revisions, on an annual basis, resulting from reviews of the seasonal adjustment process. Estimates derived from the Labour Force Survey (a survey of households) are usually only revised once a year. Revisions to estimates derived from other sources are usually minor and are commented on in the Statistical Bulletin if this is not the case. Further information is available in the Labour Market Statistics Revisions Policy (36.7 Kb Pdf)
.

(vi) Accuracy of the Statistics: Estimating and Reporting Uncertainty

Most of the figures in this Statistical Bulletin come from surveys of households or businesses. Surveys gather information from a sample rather than from the whole population. The sample is designed carefully to allow for this, and to be as accurate as possible given practical limitations like time and cost constraints, but results from sample surveys are always estimates, not precise figures. This means that they are subject to some uncertainty. This can have an impact on how changes in the estimates should be interpreted, especially for short-term comparisons.

We can calculate the level of uncertainty (also called “sampling variability”) around a survey estimate by exploring how that estimate would change if we were to draw many survey samples for the same time period instead of just one. This allows us to define a range around the estimate (known as a “confidence interval”) and to state how likely it is in practice that the real value that the survey is trying to measure lies within that range. Confidence intervals are typically set up so that we can be 95% sure that the true value lies within the range – in which case we refer to a “95% confidence interval”.

For example, the unemployment rate for September to November 2014 was estimated to be 5.8%. This figure had a stated 95% confidence interval of +/- 0.2 percentage points. This means that we can be 95% certain that the true unemployment rate for September to November 2014 was between 5.6% and 6.0%. However, the best estimate from the survey was that the unemployment rate was 5.8%.

The number of people unemployed for the same period was estimated at 1,914,000, with a stated 95% confidence interval of +/- 76,000. This means that we can be 95% sure that the true number of unemployed people was between 1,838,000 and 1,990,000. Again, the best estimate from the survey was that the number of unemployed people was 1,914,000.

As well as calculating precision measures around the numbers and rates obtained from the survey, we can also calculate them for changes in the numbers. For example, for September to November 2014, the estimated change in the number of unemployed people since June to August 2014 was a fall of 58,000, with a 95% confidence interval of +/- 82,000. This means that we can be 95% certain the actual change in unemployment was somewhere between an increase of 24,000 and a fall of 140,000, with the best estimate being a fall of 58,000. As the estimated fall in unemployment of 58,000 is smaller than the confidence interval of 82,000, the estimated fall in unemployment is said to be “not statistically significant”.

Working with uncertain estimates

In general, changes in the numbers (and especially the rates) reported in this Statistical Bulletin between three month periods are small, and are not usually greater than the level that is explainable by sampling variability. In practice, this means that small, short-term movements in reported rates (for example within +/- 0.3 percentage points) should be treated as indicative, and considered alongside medium and long-term patterns in the series and corresponding movements in administrative sources, where available, to give a fuller picture.

Seasonal adjustment and uncertainty

Like many economic indicators, the labour market is affected by factors that tend to occur at around the same time every year; for example school leavers entering the labour market in July and whether Easter falls in March or April. In order to compare movements other than annual changes in labour market statistics, such as since the previous quarter or since the previous month, the data are seasonally adjusted to remove the effects of seasonal factors and the arrangement of the calendar. All estimates discussed in this Statistical Bulletin are seasonally adjusted except where otherwise stated. While seasonal adjustment is essential to allow for robust comparisons through time, it is not possible to estimate uncertainty measures for the seasonally adjusted series.

Background notes

This month's Release

The headline claimant count estimates published in this Statistical Bulletin do not include claimants of Universal Credit. Since July 2014 ONS has published, at data table CLA03 (70 Kb Excel sheet)
, statistics providing an indicative representation of how the Claimant Count might look if experimental statistics published by the Department for Work and Pensions were included. From this month’s release, these statistics also appear in this Statistical Bulletin at Table 10(1). See Background Note 3 for further information about the impact of Universal Credit on the Claimant Count.

Next month’s Release

There are no major developments planned for next month’s release.

Introduction of Universal Credit

The Pathfinder for Universal Credit started on 29 April 2013 with the introduction of this new benefit in one Jobcentre Plus office. This has been extended to further Jobcentre Plus offices across Great Britain:

By 12 June 2014 (the Claimant Count date for June 2014), Universal Credit had been introduced in 10 Jobcentre Plus offices across Great Britain.

By 11 December 2014 (the Claimant Count date for December 2014), Universal Credit had been introduced in 91 Jobcentre Plus offices across Great Britain, of which 85 were in the North West region.

Universal Credit will replace a number of means-tested benefits including the means-tested element of Jobseeker’s Allowance (JSA). It will not replace contributory based JSA.

The Claimant Count measures the number of people claiming benefits principally for the reason of being unemployed. Since October 1996 it has been a count of the number of people claiming JSA. Following a consultation in 2012 by ONS, it was decided that, with the introduction of Universal Credit, the Claimant Count would include:

people claiming contribution-based JSA (which is not affected by the introduction of Universal Credit),

people claiming income-based JSA during the transition period while this benefit is being gradually phased out, and

people claiming Universal Credit who are not working and who are subject to a full set of labour market jobseeker requirements, that is required to be actively seeking work and available to start work.

The headline Claimant Count estimates from May 2013 onwards, published in this Statistical Bulletin, do not include claimants of Universal Credit. ONS will include jobseeker Universal Credit claims in the headline Claimant Count statistics as soon as possible.

Since July 2014, ONS has published an indicative adjusted Claimant Count including experimental estimates of claimants of Universal Credit as well as JSA claimants at data table CLA03 (70 Kb Excel sheet)
. From this month’s release these statistics are also published in this Statistical Bulletin at Table 10(1).

The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.

Designation can be broadly interpreted to mean that the statistics:

meet identified user needs;

are well explained and readily accessible;

are produced according to sound methods; and

are managed impartially and objectively in the public interest.

Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.